Now that the decade is over, and I have had some time to reflect, I have come to a very sober realisation. This may have been the last decade of railroading. Hear me out. As we move into the next decade, a few things jump out at me. The first is how unimportant railroads have become recent years. Rail currently has an 8% market share of freight movement by weight of shipments. 8%, that is it. Pipelines move more freight by weight than rail. If we were to factor in ton-mile share, it gets better, but it is still not great. The key takeaway here is that in terms of amount of goods moved each year, railroads have become irrelevant. It is not difficult to believe that if every railroad shut down tommorow, trucks could make up the difference, given an adjustment period. What is worse however, is that within this landscape of irrelevance and PSR-induced lack of growth, technology on the horizon aims to make rail completely obsolete. Autonomous electric trucks look to slash the cost of trucking dramatically, wiping out almost any purpose rail had. If the point of railroads was to save shippers money, why would anyone ship by rail if they could get affordable prices moving on trucks. The Tesla Semi, set to launch next year looks to be the harbinger of these changes. Elon Musk famously called the Tesla Semi "economic suicide for rail." As we wave the 2010s goodbye, it is becoming increasingly clear that we may have to wave the railroads goodbye as well. The future looks dark, very dark.
I disagree. Trains will always move lots of heavy stuff long distances. There will never be enough trucks in the country to make a dent in most of that business, or enough roads for them to travel over. Musk can keep saying Tesla's on the brink of a revolution, but what would you expect him to say? Somebody do the math and tell me how much it would cost for a fleet of trucks-Tesla or conventional- to haul 1 unit train of corn from Worthing SD to Seattle WA.
Thanks to Chris / CopCarSS for my avatar.
Murphy Siding I disagree. Trains will always move lots of heavy stuff long distances. There will never be enough trucks in the country to make a dent in most of that business, or enough roads for them to travel over. Musk can keep saying Tesla's on the brink of a revolution, but what would you expect him to say? Somebody do the math and tell me how much it would cost for a fleet of trucks-Tesla or conventional- to haul 1 unit train of corn from Worthing SD to Seattle WA.
If his data is correct, 8% of heavy stuff is not a major player. As coal loses out to natural gas at power plants, that 8% will decline more. And the share of all freight is even less than 8% now. The rails are not actively seeking new business, just cost-cutting, which is a sign of a dying operation. I hope some creative folks step in and reverse this trend. But they wouldn't be welcomed by archaic rail management.
Agreed. I come from a family of truckers, trucks will never replace trains for bulk agricultural and manufacturing raw materials.
And much more could have been done, and still can be done, to get more of these 80,000 lb trucks on to flat cars for long distance moves.
The government screwed that up in 1950, they should do more now to correct their mistake.
I don't see self driving anything happening real soon.............
As for Tesla, until we make other changes, or solve other problems, the coal will still need to get to the power plant, to generate the electricity to charge the Tesla..........
Unless someone decides it is ok to build some more nuclear power plants?
I don't see where we are gaining anything there?
If, in 1950, the government had deregulated both rail and trucking, and had they held the line on trailer length and weight, everything long haul would travel by piggyback today, and the highways would be safer.
Most truckers are very safe drivers, but they can't control the stupid people in the little cars....... That makes even bigger trucks an even bigger problem.
35' trailers were well suited to urban streets and deliveries, 53' ones, not so much........
Sheldon
For those here who have never witnessed the BNSF southern transcon as it is adjacent to I-40 (or any similar RR paralelling a major interstate highway) you cannot imagine those thousands of loads being on the Interstate highway with you.
Creating statistics does not always recognize reallity.
Spoken like a modern-day Luddite.
theman if every railroad shut down tommorow, trucks could make up the difference,
Russell
Sheldon: In 1997. 52.8% of electricity in the US was generated from coal, in over 2000 plants. In 2018, coal's share was only 27.4% in only 359 plants. The reason? A switch to natural gas because of Adam Smith's theories. Moody's estimates the coal share will continue to decline to 11% by 2030. So when one of the rails' major revenue and profit sources shrinks to 1/5 in size in 30 years, a prudent management would search for new revenue streams.
charlie hebdo Sheldon: In 1997. 52.8% of electricity in the US was generated from coal, in over 2000 plants. In 2018, coal's share was only 27.4% in only 359 plants. The reason? A switch to natural gas because of Adam Smith's theories. Moody's estimates the coal share will continue to decline to 11% by 2030. So when one of the rails' major revenue and profit sources shrinks to 1/5 in size in 30 years, a prudent management would search for new revenue streams.
Charlie, I know that, and that's a good thing in my mind, but that big coal plant here in Baltimore still chugs on.......
But I still don't see grain, plastic pellets, and a buch of other stuff moving in any real volume by truck.
And using coal or oil to generate electricity to charge up Tesla trucks just seems silly, knowing what I know about electricity and automobiles.........
I'm all for progress when it is real progress. Not using coal to make electricity would be real progress, not just from an environmental standpoint.
I think the ton/mile efficiency of railroads should be exploited more. And as I have made clear, I want less 80,000 lb tractor trailers on the highways - for multiple reasons.
Are the railroads poorly run? I would say yes, but that can change, just ask Adam Smith......
Sheldon: You seem to have missed several points.
Need reading glasses?
charlie hebdo Sheldon: You seem to have missed several points. Need reading glasses?
Charlie, I'm done, I have much more important stuff to do.......
Maybe one day we can all be as smart as you.......
But I doubt it.
Rio Grande Valley, CFI,CFII
charlie hebdo Murphy Siding I disagree. Trains will always move lots of heavy stuff long distances. There will never be enough trucks in the country to make a dent in most of that business, or enough roads for them to travel over. Musk can keep saying Tesla's on the brink of a revolution, but what would you expect him to say? Somebody do the math and tell me how much it would cost for a fleet of trucks-Tesla or conventional- to haul 1 unit train of corn from Worthing SD to Seattle WA. If his data is correct, 8% of heavy stuff is not a major player. As coal loses out to natural gas at power plants, that 8% will decline more. And the share of all freight is even less than 8% now. The rails are not actively seeking new business, just cost-cutting, which is a sign of a dying operation. I hope some creative folks step in and reverse this trend. But they wouldn't be welcomed by archaic rail management.
Actually, it's just part of the railroad industry that isn't seeking new business. Agreed, a large and visible part - most of the class one carriers.
Even that isn't totally true. They seek new business, as long as it meets their criteria. That is, business that doesn't cost too much to handle. That would be mostly certain types of intermodal business. Clearly, they could grow if they wanted to. And some of the early PSR practicioners have dumped some, but not all of the PSR tenents, and realized they need to grow. Ultimately, you reach a point when you can't cut anymore.
Thank God for the short lines and regionals that do go after business with less stringent criteria.
Jeff
My two cents is that while I have concerns that you are right, I think your time frame is too pessimistic I think they will still be in business in ten years but will still be shrinking. I see the current spin off of branches a sign that like a tree, that is not watered, it sheds leaves to match the food & water supply. I do not believe many short lines are able to reinvest in their facilities and when the track needs restoration to class 1 (10 mph) they don't have the retained earnings to reinvest in the plant. Or if a bridge gete damaged or a flood washes out the track, they fold. And each time that happens, the Class 1's loose more of their sustenance.
When I look at maps of railroads in the midwest, I note the large number of rail ROW's that are no longer in existance. The remaining majors are concentrating their traffic on the fewer remaing ROW's but the amount of the country that doen't have a Class 1 line near the population centers is growing. If you want to site an Auto Plant or other large manufacturing plant that needs significant transportation assests, the choices are getting more limited. I was a little suprised that Honda was able to get the former NYC ROW between Cincinnati & Indianapolis now operated by IORy to meet their needs. Greensburg IN got a nice plant and a nice seven track vehicle loading yard was built. As well as a small engine servie facility and a five track yard for car handling. But from looking at the map, it looks like all the traffic is taken to Cincinnati and the track West of Greensburg is used for car storage. This used to be a busy line with multiple freight trains and six daily passenger trains back in the fifties.
When you look at states like Michigan and New York, you can see large areas with no rail service where it had been.
So your premise that RR's are dying has some justification. How the time line works out remains to be seen.
ATLANTIC CENTRAL charlie hebdo Sheldon: You seem to have missed several points. Need reading glasses? Charlie, I'm done, I have much more important stuff to do....... Maybe one day we can all be as smart as you....... But I doubt it. Sheldon
My point was that twice Sheldon said that electric vehicles are silly because the electricity comes from coal and oil. In fact the use of coal in power plants has declined from over 50% to ~23% in 20 years and the prediction is it will be much less by 2020.
So Sheldon, try to absorb that between your self-promoting posts about your business, which I think is in violation of forum rules. Years ago Hank got banished for promoting his rail excursions, AFAIR.
Yet, every day, some 50 trains pass through Deshler, Ohio. Coal is a small part of that traffic, and what coal does pass through there is usually met coal, likely headed for export.
Per a variety of sources, coal makes up 15-17% of railroads' revenue. That means 83-85% of the traffic takes other forms. Losing all of the coal traffic would take away ~17% of the revenue - and some similar portion of the costs of operation.
There are still unit trains of taconite, oil, phospate, ethanol, coke, grain - that I can think of.
Manifest trains usually run as long as the plant will let them - some over 12,000 feet.
Solid trains of auto racks (empty and loaded) come through daily. Fresh-from-the-mill steel also makes a regular (ie, daily) appearance, enroute to other mills for further processing.
And that doesn't even begin to address the container traffic seen there daily.
Coal for heating and electrical generation may be down, but there's still plenty of traffic on the rails.
And if/when the railroads finally discard PSR, maybe they'll get around to seeking out other such traffic, as well as recovering traffic they've lost, like the perishables from the west coast.
As Mark Twain said - "Rumors of my demise are greatly exaggerated."
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
charlie hebdoMy point was that twice Sheldon said that electric vehicles are silly because the electricity comes from coal and oil. In fact the use of coal in power plants has declined from over 50% to ~23% in 20 years and the prediction is it will be much less by 2020.
I don't know the figures.
If, a big if, electrically powered cars were to totally replace fossil fueled vehicle - and the primary means of getting this electricty to the roads was from some form of stoage batteries - how much additional electrical capacity would have to be built into the nation's electrical grid to supply the electricity to recharge these batteries?
Never too old to have a happy childhood!
charlie hebdoIn fact the use of coal in power plants has declined from over 50% to ~23% in 20 years and the prediction is it will be much less by 2020.
You really think a lot of change will occur during the next three and a half hours?
;-)
Typo. 2030.
Balt: The big decline from 1997 to 2018 is a done deed; the 2030 figure is only an estimate/prediction from Moody's, but they are usually pretty accurate.
I don't think the railroads are suddenly running out of things to move. All you have to do is look at train movements, and see that there is an astounding amount of raw materials moving every day. I don't think the future is as dark as some might think.
theman Rail currently has an 8% market share of freight movement by weight of shipments. 8%, that is it. Pipelines move more freight by weight than rail. If we were to factor in ton-mile share, it gets better, but it is still not great.
Rail currently has an 8% market share of freight movement by weight of shipments. 8%, that is it. Pipelines move more freight by weight than rail. If we were to factor in ton-mile share, it gets better, but it is still not great.
Freight is moved by:
air, ocean ship, river ship and barge, pipeline and truck.
How about breaking the "freight by weight" out for all of the above.
Then ton-miles.
Then value-miles.
Seems only fair. Get back to us on that, please.
Ed
theman Now that the decade is over, and I have had some time to reflect, I have come to a very sober realisation. This may have been the last decade of railroading. Hear me out. As we move into the next decade, a few things jump out at me. The first is how unimportant railroads have become recent years. Rail currently has an 8% market share of freight movement by weight of shipments. 8%, that is it. Pipelines move more freight by weight than rail. If we were to factor in ton-mile share, it gets better, but it is still not great. The key takeaway here is that in terms of amount of goods moved each year, railroads have become irrelevant. It is not difficult to believe that if every railroad shut down tommorow, trucks could make up the difference, given an adjustment period. What is worse however, is that within this landscape of irrelevance and PSR-induced lack of growth, technology on the horizon aims to make rail completely obsolete. Autonomous electric trucks look to slash the cost of trucking dramatically, wiping out almost any purpose rail had. If the point of railroads was to save shippers money, why would anyone ship by rail if they could get affordable prices moving on trucks. The Tesla Semi, set to launch next year looks to be the harbinger of these changes. Elon Musk famously called the Tesla Semi "economic suicide for rail." As we wave the 2010s goodbye, it is becoming increasingly clear that we may have to wave the railroads goodbye as well. The future looks dark, very dark.
I find it hard to believe that our politicians, short-sighted though they may be, would allow all of those bulk commodities to be hauled on the highways. Our interstates are saturated with trucks as it is. At some point, they'll modify regulations or tax policy to change the economics and keep freight moving over the rails.
tree68 Coal for heating and electrical generation may be down, but there's still plenty of traffic on the rails. As Mark Twain said - "Rumors of my demise are greatly exaggerated."
charlie hebdoBalt: The big decline from 1997 to 2018 is a done deed; the 2030 figure is only an estimate/prediction from Moody's, but they are usually pretty accurate.
I am not talking about rail traffic, per se. If electricity is the 'over the road' fuel of transportation - how much additional electrical generating capacity will have to be built to satisfy the additional demand? With minor impact of EV's today, the relative impact is not much more that some individuals having electrical space heaters. When 'everybody' will be adding to the demand curve to satisfy their transportation needs - that demand curve is going to raise exponentially.
Here is some 2017 freight by weight and value information from National Transportation Statistics, which is published by the U.S. Bureau of Transportation Statistics.
I think the premise is flawed in the first post. 8% by weight means little out of context. Those trucks are hauling lots of goods short distances. They haul tons of potatoes to McDonalds restaurants all over the country.. Trains cannot pull up to each fast food joint. We build Cadillacs and SUVs here in LAnsing. If 50 of them need to move 40 miles north, they don't find a train. Lots and lots of that freight traffic in no way competes with trains. But it sure does dilute that statistic.
The Andersons has a large grain elevator near here in Webberville. It DOES use the train. No one will replace a two mile long grain train with trucks. But that same grain weight was hauled to the elevator by local trucks. There is that context again.
EnzoampsI think the premise is flawed in the first post. 8% by weight means little out of context.
Exactly.
York1 John
Here is the modal share by ton-miles. 2017 latest data.
https://www.bts.gov/us-ton-miles-freight
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